REG - 888 Holdings plc - Strategic Review of US B2C operations

888 HoldingsAnnouncement

06/03/2024 07:00

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RNS Number : 7191F  888 Holdings plc  06 March 2024

 

6 March 2024

 

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

FOR IMMEDIATE RELEASE

888 Holdings Plc

("888" or "the Group")

 

Strategic Review of US B2C operations

Authentic Brands Group Agrees to Consensual License Termination for US
Territory

888 (LSE: 888), one of the world's leading betting and gaming companies with
internationally renowned brands including William Hill, 888 and Mr Green,
today announces a strategic review of its US B2C operations. As part of this
strategic process, the Group will consider all potential alternatives that can
deliver value for the business. Such alternatives could include the sale (in
whole or in part) of the Group's US B2C business, the controlled exit of US
B2C operations, or other possible strategic transactions.

888 is active in four states, with SI Sportsbook and SI Casino in Michigan, SI
Sportsbook in Colorado and Virginia and 888casino in New Jersey. The gross
profit margin in the US is lower than the group level, reflecting significant
direct costs of operating in the market including duties, market access fees,
and licence fees, in addition to intense competition from well-capitalised
incumbent participants. The Group has determined that its current structure
will not optimise returns, and has initiated a strategic review of the
operations.

As a result of this determination and review, the group has mutually agreed to
part ways, concluding its partnership with Authentic Brands Group. This
partnership had granted exclusive use of the Sports Illustrated brand for
online betting and gaming. As part of the termination agreement, 888 has
agreed to pay a fee of $25 million, which will be paid in cash from available
resources. Additionally, 888 will pay an extra $25 million between 2027 and
2029. The termination of this agreement is expected to result in operating
cost savings of approximately $6 to $7 million per year in 2024 and 2025.

The Group has not set a timetable for the completion of its strategic review
and there can be no assurance regarding the results or outcome of the review.
The Group's existing B2B arrangements in the US are unaffected by today's
announcement.

Per Widerström, CEO of 888, commented:

"Since commencing my role as CEO I have been focused on ensuring the Group is
set up to deliver strong value creation in the coming years. In the US, the
intensity of competition and requirement for scale means huge investment is
required to reach profitability.

Our partnership with Authentic has consistently driven strong demand for the
SI brand across both consumer experiences and product offerings. A series of
record-breaking months for SI Casino has underscored the strength of the SI
brand. However, despite these successes, we have concluded that achieving
sufficient scale in the US market to generate positive returns within an
accelerated timeframe is unlikely.

The strategic review of our US B2C operations will continue at pace, and I
look forward to updating shareholders on our plans for the wider Group in late
March."

 

 Enquiries and further information:
 888 Holdings Plc                        +44(0) 800 029 3050
 Per Widerström, CEO

 Sean Wilkins, CFO

 Vaughan Lewis, Chief Strategy Officer

 

 Investor Relations

 James Finney, Director of IR                                                                                                                                                                  ir@888holdings.com (mailto:ir@888holdings.com)

 Media                                                                                                                                                                                         888williamhill@hudsonsandler.com (mailto:888williamhill@hudsonsandler.com)
 Hudson Sandler                                                                                                                                                                                +44(0) 207 796 4133

 Alex Brennan / Charlotte Cobb / Andy Richards

 

 

About 888 Holdings Plc:

888 Holdings plc (and together with its subsidiaries, "888" or the "Group") is
one of the world's leading betting and gaming companies. The Group owns and
operates internationally renowned brands including William Hill, 888, and Mr
Green. Incorporated in Gibraltar, and headquartered and listed in London, the
Group operates from offices around the world.

 

The Group's mission is to lead the gambling world in creating the best betting
and gaming experiences, bringing unrivalled moments of excitement to people's
day-to-day lives. It achieves this by developing state-of-the-art technology
and content-rich products that provide fun, fair, and safe betting and gaming
entertainment to customers worldwide.

Find out more at:

http://corporate.888.com/ (http://corporate.888.com/)

 

Important Notices

This announcement may contain certain forward-looking statements, beliefs or
opinions, with respect to the financial condition, results of operations and
business of 888. These statements, which contain the words "anticipate",
"believe", "intend", "estimate", "expect", "may", "will", "seek", "continue",
"aim", "target", "projected", "plan", "goal", "achieve", words of similar
meaning or other forward looking statements, reflect 888's beliefs and
expectations and are based on numerous assumptions regarding 888's present and
future business strategies and the environment 888 will operate in and are
subject to risks and uncertainties that may cause actual results to differ
materially. No representation is made that any of these statements or
forecasts will come to pass or that any forecast results will be achieved.
Forward-looking statements involve inherent known and unknown risks,
uncertainties and contingencies because they relate to events and depend on
circumstances that may or may not occur in the future and may cause the actual
results, performance or achievements of 888 to be materially different from
those expressed or implied by such forward looking statements. Many of these
risks and uncertainties relate to factors that are beyond 888's ability to
control or estimate precisely, such as future market conditions, currency
fluctuations, the behaviour of other market participants, the actions of
regulators and other factors such as 888's ability to continue to obtain
financing to meet its liquidity needs, changes in the political, social and
regulatory framework in which 888 operates or in economic or technological
trends or conditions. Past performance of 888 cannot be relied on as a guide
to future performance. As a result, you are cautioned not to place undue
reliance on such forward-looking statements. The list above is not exhaustive
and there are other factors that may cause 888's actual results to differ
materially from the forward-looking statements contained in this announcement.
Forward-looking statements speak only as of their date and 888, its respective
parent and subsidiary undertakings, the subsidiary undertakings of such parent
undertakings, and any of such person's respective directors, officers,
employees, agents, affiliates or advisers expressly disclaim any obligation to
supplement, amend, update or revise any of the forward-looking statements made
herein, except where it would be required to do so under applicable law. No
statement in this announcement is intended as a profit forecast or a profit
estimate and no statement in this announcement should be interpreted to mean
that the financial performance of 888 for the current or future financial
years would necessarily match or exceed the historical published for 888.

 

 

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